Wolf Richter: Financial Chaos, Junk Bond Edition
Junk bonds are at 2008 bottom levels by some measures. But are they a bargain, or a falling safe?
Read more...Category Archives: Risk and risk management
Capital Requirements: Another Odd Attempt to Declare Victory on Dodd-Frank
I suppose we’re going to have to deal with half-truths and logical stretches about Dodd-Frank right through until November, but Bernie Sanders’ focus on Wall Street has really ramped this up of late. The trajectory appears to be a show of proof of some sort, followed by a blog link from Paul Krugman, at which point the citation hardens into conventional wisdom. The version of this that began a few days ago with Wonkblog’s Matt O’Brien has a level of truth to it, of course, but I don’t think it reveals exactly what its endorsers think.
Read more...CalPERS Takes on Risk Where Federal Government Fears to Tread: Provides Liquidity to a Derivatives Central Counterparty on the Cheap
CalPERS has engaged in one of the most bone-headed moves ever, the financial equivalent of picking up pennies before a steamroller.
Read more...Wobbly Italian Banks May Get “Bad Bank” Resolution Vehicle
Italian banks’ extend and pretend game may be coming to an end.
Read more...Funds Hold Most Cash Since GFC
Fund manager cash holdings are at crisis-bottom levels, typically a sound bullish indicator. But will history predict the future this time?
Read more...What’s Your Threat Score?
Pre-crime has arrived.
Read more...Why Larry Summers is Wrong and Bernie Sanders is Right on Glass Steagall
Larry Summers, acting as a proxy for Team Clinton, attacked Sanders’ reform proposals, particularly the an updated Glass Steagall. Her’s why Summers is wrong.
Read more...CalPERS: Stockholm Syndrome and Cowardice on Private Equity Fee Disclosure
I have wanted to leave CalPERS alone. Really. Truly. But they keep asking for attention in the worst possible way.
Read more...Wolf Richter: IPO Window Suddenly Closes, “Worst Year Since 2009,” Worst December Since 2008
The IPO market shutting down does not bode well for private equity returns, and may be sending a warning about real economy prospects.
Read more...We Won a Fight Against CalPERS Over Its Plan to Ignore Private Equity Risk
A Los Angeles Times headline recapping a board meeting Monday says it all: “CalPERS shelves controversial private equity policy.”
Read more...Debunking “The Big Short”: How Michael Lewis Turned the Real Villains of the Crisis into Heroes
How Michael Lewis’ The Big Short, whether for profit or by accident, has denied the public the truth about what really causes the crisis.
Read more...Medical Educators Launch Trials of Increased Sleep Deprivation of Physician Trainees Apparently in Violation of the Nuremberg Code
In a likely violation of the Nuremberg Code, a study increased the sleep deprivation of medical residents above already-high current levels.
Read more...CalPERS Used Sleight of Hand, Accounting Tricks, to Make False “There is No Alternative” Claim for Private Equity
CalPERS staff and outside experts went to considerable lengths distort data and abuse analytical methods to make the case that only private equity could offer the allegedly superior returns needed to meet CalPERS’ targets. The fact that CalPERS did not make an honest case for private equity suggests that no honest case could be made.
Read more...Nina Eichacker: Lessons from Iceland’s Financial Crisis
A look at Iceland’s financial crisis, why it happened and what can be done to mitigate the potential for similar chaos in the future.
Read more...Supervising Culture and Behavior at Financial Institutions
Financial regulators increasingly acknowledge organizational culture as a source of systemic risk, yet they have been loath to do more than influence compensation structures, since they do not want to be perceived to be interfering with management. This post describes a new approach in the Netherlands that
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